Universities face a defining moment

The start of a new year is as good a time as any to ask questions about life, the universe and everything. So here are a couple of pressing ones for higher education: What are universities for? And are they being regulated and funded in a way that allows them to deliver?

These questions need urgent consideration by policymakers in England in particular, ahead of the game-changing decisions that will follow the funding review led by Philip Augar.

If universities are for delivering a narrow range of degrees to a select student body, providing job-ready skills and higher graduate salaries (and therefore larger tax revenues), then that is one thing. If they are multifaceted institutions that play a far more fundamental role in society, then that is another.

This needs restating because the suggestions are that the Augar review is gearing up to prepare a significant cut in funding – an outcome made more likely by last month’s decision by the Office for National Statistics on how to account for tuition fee debt, adding £12 billion to the national deficit.

The only leaks to have sprung from the review indicate that it could suggest lowering the tuition fee cap in England to £6,500. Significant top-up funding seems unlikely.

The public are unlikely to shed a tear for universities, which have been cast as bloated beneficiaries of the indebted young and smoke and mirrors in the national accounting.

But the reality is that a cut to £6,500 would take more than £3 billion a year out of universities.

Factor in the potential losses stemming from Brexit, from European research funding programmes, from European Union and international students put off by the UK’s declining status and its impoverished universities, and the additional financial burden likely in the form of pension contributions to the Universities Superannuation Scheme and the Teachers’ Pension Scheme, and the financial hit could be significantly higher.

In this new world, the shape and role of universities are in danger of changing dramatically. Universities will have no choice but to retrench to core functions.

First to go will be the civic engagement work that means so much to towns, cities and regions: the subsidised museums, the outreach work that drives social mobility, and the commercial engagement that helps to keep small businesses alive and local economies and communities solvent.

Next will be estates investments planned or under way, which through lean years have kept the construction industry going in many UK regions. Following close behind will be staff cuts, and then we will be into areas such as student support, seen as secondary to teaching and research.

It is hard to imagine this when, for example, mental health is such a vital focus for universities (and, indeed, ministers), and some would protect this particular area.

But the inescapable reality of £3 billion in cuts is that scope for special pleading will be slim. Ultimately, universities will have to address their actual course structures and the breadth of their offerings.

Some of this, policymakers may consider desirable. Some of it, they will not care about one way or the other. Other bits will no doubt be branded as unacceptable or off limits, and pressure will be brought to bear. Individual universities will make different decisions, too.

But these are the decisions that will have to be made if the cuts are handed down in the way that many now fear is likely if Theresa May gets her way.

The caveat is that even if the review does recommend such significant measures, it is questionable whether such plans would get through the Commons. The government has no majority, and the two most recent universities ministers, Jo Johnson and Sam Gyimah, are among those likely to challenge from the back benches.

But with universities back in the firing line, there is a clear risk that we impoverish the country just as Brexit threatens to do the same thing.

So now is the moment to take stock. What do we want universities to do and to be? And will disinvestment of £3 billion a year give them a chance of living up to those hopes and aspirations?

john.gill@timeshighereducation.com